World Cup showcases Oregon grass seed

Michael Lloyd, The OregonianRick Myers, vice president of sales for DLF International Seeds, gets into the spirit of the World Cup at the company's research field in Philomath. DLF helped supply grass seed for the tournament, which showcased the state's grass seed industry.

An estimated 1 billion viewers will be watching the final match of the World Cup today, and the brilliant green blades beaming from television screens worldwide are quite an endorsement of Oregon's grass seed industry.

The good press comes at a crucial time for an industry hammered by the housing downturn, which dried up demand for new lawns, and a slowdown in golf course development and cash-strapped governments reining in parks maintenance.

"The World Cup is one of the many high-profile events that Oregon grass seed supports," said Roger Beyer, executive director of the Oregon Seed Council. "I don't know if it will do a whole lot for sales. We are already recognized as the highest-quality producer.

"The reality is the majority of the seed is used in residential developments, parks and golf courses," Beyer said. "We need the economy to pick up."

Michael Lloyd, The OregonianOrchardgrass, which goes into pastures and hay, goes to seed in Philomath. Willamette Valley's grass seed industry has been hit hard by the recession, though prices are starting to bounce back.

Dennis Hays, executive vice president of the Oregon Seed Trade Association also worries about oversupply. "We still have last year's crops in the barn and this year's coming. It's close to a disaster." Even so, World Cup exposure is "very good for Oregon agriculture," said Rick Myers, vice president of sales for DLF, which provided 90,000 pounds of seed for the tournament, including annual ryegrass used for repairs on all the fields. "It shows the quality is very good and can be used all over the world."

Myers said his company -- the grass supplier for the 2010 Alltech World Equestrian Games in Kentucky in September -- is vying to supply the next World Cup in Brazil four years from now.

"I think it's a recognition that Oregon, this is the place where quality seed is produced, free from contamination, with the highest purity level in anywhere in the world," said Bill Dunn, general manager of Seed Research of Oregon, which provided 165,000 pounds of seed for the World Cup.

"We have had interest from companies in Europe, we've had interest from the Pacific Rim, Korea and Japan," Dunn said.

He said the exposure may lead to customers switching to a higher-quality grass. "When people are looking for quality, they look to us in Oregon."

Grass seed is big business in the state. More than half the Willamette Valley is sown for forage grass seed. The northern end produces tall fescue and perennial ryegrass, the southern end is covered in annual ryegrass, and fine fescue is grown in the hills of Silverton. Most are cool-season turf and forage seed crops, with the main varieties being ryegrass, orchardgrass, Kentucky bluegrass, bentgrass and fescue.

The state's 1,500 grass seed farms supply about two-thirds of the world's cool-weather grasses. The Willamette Valley has more acreage in grass seed than all other agricultural uses combined.

It has historically been the No. 2 valued crop in the state, behind nursery plants or Christmas trees, but last year it dropped to fourth, switching places with cattle, according the Bruce Pokarney of the state Department of Agriculture.

"As the economy went into recession, grass seed followed that market slump," said Mark Mellbye, a professor at Oregon State University and head of the extension service for Linn County. Sales fell from $508.7 million in 2008 to $319.7 million in 2009, according to OSU data.

There are several contributing factors for the decline, starting with the real estate bubble.

"When the housing thing stopped, we got into trouble real quick," said Dennis Glaser of Harrisburg who farms 5,500 acres of grass seed. "When housing stopped in 2007, we went from 10 to 12 trucks shipped a day to zero trucks."

In 2008, his sales were 55 percent of the year before, and in 2009 they were 65 percent of normal, Glaser said. This year he's expecting 65 to 70 percent of normal.

The development of drought-resistant grasses better adapted to dry, fast-growing areas in California, Arizona and Nevada, played a key role in expanding the market for Oregon seed. But, when the housing bubble burst, it all "kind of collapsed," Mellbye said.

The Associated Press Oregon-grown seeds will be used to repair battered World Cup fields, such as this one hosting the quarterfinal match between Uruguay and Ghana earlier this month.

The steep drop in golf also has hurt. Upwards of 1,000 public golf courses will close over the next few years, according to a recent study by the National Golf Foundation. It said the weak economy and too many greens are significant factors.

And water restrictions, particularly in the Southwest, will continue to limit golf course development and home lawns. The water restrictions bug seed growers and dealers, who contend that grasses replenish oxygen and lower temperatures.

But the biggest problem is oversupply, said Kevin Loe, owner of Triangle Farms, which has 1,500 acres in grass seed, down significantly from previous years.

Loe said growers are being "held hostage" by contracts that a
llow seed dealers to hold off paying until they get the price they want.

Fuel prices have been a major problem, he said. "We're already $4,000 over budget, and we're only half way through the year, with the biggest usage coming up."

Still, he is optimistic about the future.

"Sales have been off, but we still moved a lot of seed," he said. Fine fescue markets moved same amount of seed as in the past, but at lower prices. And the consumer market has been good, Loe said, with sales up in the big-box stores as warmer weather kicks in around the country.

And there are other signs. Mellbye, the OSU professor, said the use of grass for forage, for example, is benefiting from a recent rise in cattle prices.

Much of the grass seed acreage is in annual ryegrass, and 80 percent of that is used for cattle pastures in the south, he said. "One hundred percent of orchardgrass goes into pastures and hay."

Prices for grass seed dropped to 15-16 cents a pound at the depth of the recession, but have bounced back, now approaching 28 cents a pound, Mellbye said, noting that OSU considers 25 cents a pound to be the break-even point.

"So, we're sitting here as the world's best spot to grow seed crops," he said. "I think the long-term outlook for seed industry is good, but it's going to be a struggle next couple of years."